Customers reported numerous “franchise threatening” transmission problems to Toyota’s Lexus luxury brand.

In some of its models as early as 2004, according to documents filed as part of a Canadian lawsuit against the company. The  documents from Toyota acknowledge problems with the automatic transmissions in Camry, Sienna, Highlander and Lexus ES vehicles. “Lexus dealer owners are using the term ‘franchise threatening’ regarding this issue,” says one internal document, dated Aug. 6, 2004, and labelled as confidential.

It adds that the Lexus dealers were doing a good job “shielding” Toyota from the complaints, but warns that a fix is needed soon. “If (Lexus dealers) stop trying to take care of customers complaining, the numbers of complaints/buybacks will be astronomical,” the document says. The documents were filed in the Ontario Superior Court as part of a lawsuit against Toyota Canada by a Toronto woman.

Karen Stekel claims Toyota is responsible for an accident in which she allegedly lost control of her Lexus ES330 and drove it into a tree, causing her “serious and permanent injuries.” Ms. Stekel’s statement of claim says Toyota failed to fix problems with the vehicle, which included lurching and sudden acceleration. Toyota’s documents acknowledge there were software problems in certain Lexus ES330 vehicles — including “hesitation when deciding to accelerate after slowing down,” “excessive time required for transmission to up-shift when travelling at city speeds,” and “intermittent clunk feeling with light throttle and travelling at city speeds.”

However, in its statement of defence the company blames Ms. Stekel for the accident, saying she was travelling too fast for the road conditions, wasn’t wearing a seat belt and was “impaired by the consumption of alcohol, drugs, or by lack of sleep, illness, poor health, or by some combination thereof.” Ms. Stekel’s lawyer, Ted Charney, will be in court Tuesday to argue that parent company Toyota Motor Corp. should be added to the list of defendants, which currently include Toyota Canada, the dealership that sold Ms. Stekel her car and the company that financed the purchase. He will also argue that Stekel should be awarded punitive damages by the company.

Toyota has been involved in a massive recall of eight million vehicles worldwide due to problems with the accelerator pedals and braking systems. The company maintains the issues are purely mechanical and has long denied allegations that they were the result of a software glitch.

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